Factors to consider before applying for another credit card

The number of individuals carrying more than one credit card is growing at a staggering pace in the country. The need for another card may arise from the desire to have a higher spending capacity, the idea to improve one’s credit score, the desperation to settle the debts on the existing card(s)) through the balance transfer facility, and several others. 

Prominent benefits of getting another credit card 

Access to a higher credit limit: If you are struggling to meet your daily and monthly expenses with your current card, you can either request the bank to revise your credit limit or apply for a new card. A new credit card would significantly raise your total credit limit and thus you should be able to meet your financial needs comfortably. 

More reward points: This is one of the most common reasons for getting a new credit card. Reward points serve as a big attraction for individuals to use credit cards. The accumulate points can be redeemed for a plethora of options like gift items, air tickets, and many more. 

Balance transfer facility: Using this option, you can transfer the outstanding dues from your high-interest credit cards to one with a low rate of interest. You can then pay the debts on the new card in due course. However, before availing this facility, do check out the fees and charge involved. 

Category-specific card: Having more than one card gives you the privilege of having cards specially designed to deliver the best benefits on certain categories like shopping, dining, travel, etc. So, figure out the category where you spend the most and get a card that offers attractive offers on the same. 

Factors to check before applying for another credit card 

Check your credit score: This is due to the fact that a poor credit score would lead to the rejection of your credit card application by the concerned bank. If you have a low credit score, first try to improve it by timely payments of the outstanding dues on your current cards. 

Check out the fees and charges: Different credit cards come with significantly different fees and charges. So before deciding on the new card, ask yourself if you would be able to comfortably pay the one-time and the recurring charges associated with the card. 

Decide on the category: It’s best to go for a card that offers the most tempting benefits on the categories on which you spend the most. If you are a frequent traveller, you can check out for the available options on the travel category. Likewise, if you are a foodie who loves to explore new restaurants and resorts, go for a dining card. 

Do you really need another: Are you applying for the new card just because you need a credit limit that is slightly higher than the one offered by your current card? Then you may as well place a request with your card issuer to get the limit revised on your card. Also, do not go for another card just by looking at the initial or introductory offers. 

Don’t apply for multiple cards at once: This is because every time you apply for a card, the bank launches a hard inquiry on your credit account. Although a single hard inquiry wouldn’t hurt your credit report significantly, too many of them would certainly work against your credit report. 

Once you get a new credit card, take care of the following 

Do not close existing cards: 

Use all your cards: Try to use all your existing cards at least for a few times per month. This would not only keep the credit accounts active but would also help you manage your finances better and assist you in building a solid credit history. 

Pay all dues on time: If you have decided to go for a new card, you should also bear the responsibility of paying the dues on each of them by their due date at the end of every billing cycle. Delaying of payments or paying only the minimum amount due would only get you trapped in a grave financial trap in the future. 

Last word: You may be having a real need for a new credit card to manage and maintain your financial liabilities. You can certainly get a new card and then use it in such a way that it would only serve to boost your credit score while being a great financial assistant. Taking care of the points listed above would surely help you in having a wonderful experience of using your credit cards.

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